DTN Closing Grain Comments

Grains Edge Quietly Lower

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

Corn closed down 1/4 cent in the March contract and was down 1/2 cent in the December. Soybeans closed down 2 3/4 cents in the March and down 1 3/4 cents in the November. Wheat closed down 4 cents in the March Chicago, up 1/2 cent in the March Kansas City, and down 3 1/4 cents in the March Minneapolis.

The March U.S. dollar index is up 0.59 at 89.09. April gold is down $6.30 at $1,349.00 while March silver is down $0.19 and March copper is down 0.0075. The Dow Jones Industrial Average is up40 at 25,240. April crude oil is up $0.17 at $61.24. April heating oil is up $0.0174, April RBOB gasoline is up $0.0095, and April natural gas is down $0.018.

For the week:

March corn closed up 5 1/2 cents and December closed up 4 3/4 cents. March soybeans were up 38 1/2 cents in the March while the November was up 22 cents. March Chicago wheat was up 8 3/4 cents, March Kansas City wheat was up 13 cents, and March Minneapolis wheat was up 1 3/4 cents.

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Corn:

March corn ended down a quarter-cent Friday at $3.67 1/2, but was up 5 1/2 cents on the week, helped by the ongoing stretch of dry weather in Argentina and this week's report of lower crop conditions from the Buenos Aires Grain Exchange. Here in the U.S., the seven-day forecast for the Corn Belt remains split, with a dry outlook on the western side and moderate to heavy rain amounts on the eastern side. Thursday's U.S. Drought Monitor showed areas of moderate drought in southeastern Iowa and southern Illinois, areas close to the heart of U.S. corn production that will continue to get attention as we get closer to spring planting. Fundamentally, it is good to remember that plenty of corn is in storage while the trend in March corn continues to work higher in February. DTN's National Corn Index closed at $3.37 Thursday, priced 31 cents below the March contract and at its highest price in six months. In outside markets, the March U.S. dollar index turned up from a test of its January low and is trading up 0.59 after the U.S. Commerce Department said housing starts jumped up 9.7% in January and up 7.3% from a year ago, more than expected. Commodities other than grains were trading mixed Friday.

Soybeans:

March soybeans closed down 2 3/4 cents at $10.21 1/2 Friday, capping off a 38 1/2 cent gain on the week with ongoing help from Argentina's streak of dry weather. The seven-day forecast is still on the dry side, but southern Brazil and Argentina are expecting some rain on Monday, which deserves monitoring on a day when U.S. futures markets will be closed for Presidents Day. March soybean meal closed down $0.40 Friday, marking an end to eight consecutive gains, courtesy of Argentina's dry weather. The difficult part of assessing the soybean market is that if we look away from Argentina, we see a 4.1 billion bushel (bb) soybean crop on the way from Brazil and a good chance of increased U.S. soybean plantings this spring. March soybean meal is clearly in an uptrend and the March/July meal spread is near even money, a bullish clue of demand. March soybeans trended higher this week, but are still below the December high of $10.27 and don't have the same bullish clues in their futures spread. The conflicting clues for soybeans make this a tough market to call and it wouldn't be surprising to find some producers either cleaning out bins or contemplating forward cash sales (see more discussion by DTN Senior Analyst Darin Newsom in Friday's "Relationships"). DTN's National Soybean Index closed at $9.54 Thursday, its highest price in six months and priced 70 cents below the March contract.

Wheat:

March Chicago wheat fell 4 cents Friday to $4.57 3/4 while March Kansas City wheat gained a half-cent to $4.78 1/2. Both contracts had decent gains for the week but struggled to make new highs while traders assess the bearishness of plentiful wheat supplies versus the bullishness of dry conditions in the western U.S. Plains. In the big picture, it is difficult to get too bullish about wheat this early in the year as 94% of the world's wheat was grown outside the U.S. in 2017. On the other hand, given the absence of much news in the winter, increasing drought conditions in the U.S. grab traders' attention and give those on the short side of the market a good reason to cover. Heading into a three-day weekend, the seven-day forecast remains mostly dry for the western Plains while moderate to heavy rains are expected for the SRW wheat crop in the eastern Midwest. For now, the trends in winter wheat remain up. DTN's National SRW index closed at $4.33 Thursday, priced 29 cents below the March contract and near its highest price in six months. DTN's National HRW index closed at $4.37, near its highest price in six months.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd Hultman on Twitter @ToddHultman1

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Todd Hultman